Total spending on public sector employees in Ontario has gone up by nearly half over the past nine years, contributing substantially to the provincial debt, according to a new report from the conservative Fraser Institute.
At the same time, the think tank notes that most of the increase occurred before the 2009-10 budget, when the Liberal government committed to restraining spending in order to tackle the province’s ballooning debt.
The report calculates that the total spent on public sector employees -- including nurses, teachers, doctors and those who work directly for ministries -- went up 47 per cent from 2005-06 to 2013-14, while the government hired just 11 per cent more workers and inflation increased only 15 per cent. That suggests much of the cost increase was due to real increases in wages and pension spending per person, according to the report.
Indeed, average compensation per public sector employee went from $67,877 to $76,337 between 2005 and 2009, but then fell slightly to $75,960 in 2013.
At the same time, employees at the Ontario Public Service (the 15 per cent of public sector workers who work directly for ministries) saw their compensation rise 7.3 per cent in real terms between 2009 and 2013, from $123,144 to $132,165 in 2013. Their average compensation peaked at $140,385 in 2012. However, since 2009-10, the OPS ranks have fallen from 68,170 full-time equivalent positions to 64,518.
Lisa MacLeod, Progressive Conservative critic for the Treasury Board, accused the government of not doing enough to rein in spending.
“Can the treasury board president tell me how many additional job cuts we can expect in health care and education in the next few months as a result of ballooning salaries in the public sector?” McLeod asked at Queen’s Park Wednesday.
Deb Matthews, deputy premier and president of the Treasury Board, responded that her government has a “clear path to balance,” and said that the report pointed out that “compensation has been flat-lined for the past five years.”
Ontario’s spending on public sector employees was a major election issue in 2014. Former PC leader Tim Hudak, whose party lost to Kathleen Wynne’s Liberals, had committed to reducing the number of jobs in the public sector by approximately 100,000 if elected, as part of a plan he said would spur one million private sector jobs.
The new Fraser Institute report also referenced its 2013 research that found government workers in Ontario received 14 per cent more compensation on average than their private sector counterparts.
“A key reason that government workers receive higher pay than their private sector counterparts is that governments do not face the same competitive pressures and hard budget constraints as many private sector employers do,” wrote the authors of Wednesday’s report. “With few or no alternatives available for government services, government workers and their union representatives are in a position to demand more generous compensation packages.”
